What They Need is a Satnav!

Pretty much every year our family summer holiday was spent camping in the South of France. My sister and I knew when the holiday was drawing to a close; not because my parents could be heard lamenting “this time next week I’ll be in the office”, but because of the building tension of driving back. The root cause wasn’t the mileage or hours at the wheel, but the Boulevard Peripherique, a romantic sounding name for a dual carriageway simultaneously circumnavigating Paris and striking fear into British drivers finding their way back to catch a ferry home from Calais.

Like our parents we knew it was going to result in screaming, shouting, the map being thrown around the car and crucially (at least for me sister and me) the car radio being turned off. I’m pretty sure the arguments would have happened anyway, but the anticipation of the stressful journey made them inevitable and worse.

And those recollections take me to last week’s budget. In its preparation and delivery it seemed stress free – but there is no chance that this will be replicated in the autumn. Philip Hammond is not going to be given any rein let alone a free one. My parents’ stress would have been cured by a satnav, but not even that box of magic is going to work come the next budget.

If politics over the last year has taught us anything it’s that while politicians come and go, anything enshrined in law is harder to reverse. Last June we had one Prime Minister on the Thursday, none by Friday lunchtime and a new one in July. Whereas it’s now March and as yet the country hasn’t even triggered Article 50.

This is a long way of saying that while one day Philip Hammond may no longer be the person waving the battered red briefcase outside No.11 Downing Street, it is certain that if Class 4 NICs had been made into law it would have endured far longer than the Chancellor. But neither event would take as long as the time required to regain the loss of trust in the party.

It took too long for the party to realise that the planned rise in national insurance contributions for the self-employed breached a manifesto pledge. In attempting to justify higher NICs it could also be construed that the Conservatives no longer held aloft the culture of enterprise and the growth of small businesses. It’s not just well off/successful Tories that were complaining and would be affected, as significant numbers of working class and lower-middle class people are themselves self-employed.

The post-Budget ‘revolution’ is because the Prime Minister, every MP, unsuccessful candidate, canvasser, volunteer, member and even Philip Hammond stood behind that manifesto whether it be on a soapbox, doorstep or in the polling booth. So breaching it was never going to last.

That’s not to say that the tax system doesn’t need changing and hasn’t been changing with regard to the self-employed. In recent years the self-employed have gained access to an enhanced state pension along with the abolition of class 2 national insurance contributions. If raising the class 4 rate was being considered then, it would have made sense to announce that at the same time rather than now as an apparent afterthought.

There is the danger of employees and the self-employed being seen as the same, but the latter work in a riskier environment where sickness, injury or an empty order book might come storming over the horizon. So for the self-employed to have cash in the bank to invest in their firm is vital. The ‘deal’ has been that uncertainty is offset by lower tax but to many it is justifiable to narrow the gap in contributions made between the self-employed and employees who have been hit by the cuts to in-work benefits.

This, though, was not the way to do it. Undoubtedly some damage has been done to the Party by being prepared to go against a manifesto pledge, but not compared to what would have happened if it had been passed unchanged. I believe the support and trust can be rebuilt, but this needs to be done alongside finding that £600 million for Social Care that would have been delivered by raising NICs.

Perhaps the Prime Minister and Chancellor can have a look in the Peripherique!